Market Snapshot: Stocks lower as coronavirus hits Japan, Coca-Cola

U.S. stocks traded modestly lower early Friday as the impact of coronavirus continues to weigh on multinational companies and is now limiting travel in Japan.

Coca-Cola Co. said the outbreak of COVID-19, the infectious disease that originated in Wuhan, China, last year, will crimp its coming quarterly results.

How are benchmarks faring?

The Dow Jones Industrial Average DJIA, -0.86% fell 118 points, or 0.4%, to 29,101, while the S&P 500 SPX, -0.91% lost 13 points, or 0.4%, to trade at 3,360. The Nasdaq Composite COMP, -1.27% was off 44 points, or 0.4%, at 9,707.

On Thursday, the Dow closed down 128.05 points, or 0.4%, at 29,219.90, after hitting an intraday low at 28,959.65. The S&P 500 lost 12.92 points, or 0.4%, to end at 3,373.23. The Nasdaq Composite Index shed 66.21 points, or 0.7%, to settle at 9,750.96, after hitting an intrasession nadir at 9,636.94.

For the week, the Nasdaq Composite is off 0.3%, while the Dow is down 1% and the S&P 500 is 0.7% lower.

What’s driving the market?

The spread of COVID-19 inside and outside of China has been unsettling the market lately, likely contributing to gains in havens like government bonds and gold, with investors showing reluctance to hold on to equities heading into the weekend.

South Korea has reported 48 more cases, bring its total infections from the novel coronavirus to 204, and in Japan, officials from Tokyo and Osaka said they wouldn’t hold large events such as school graduation ceremonies and entrance examinations for three weeks through mid-March, in an effort to contain the viral outbreak, The Wall Street Journal reported.

Meanwhile, the World Health Organization said Friday that there are 76,767 confirmed cases of COVID-19 and 2,247 deaths, marking another day in which the number of new cases world-wide has slowed.

The full economic impact of the disease is unclear but early indications suggest that it is already denting China’s car sales. Chinese passenger car sales data for the first two weeks of February showed a year-over-year decline of 92%, Bloomberg News reported. And in the first 16 days of the month, only about 5,000 passenger cars were sold compared with nearly 60,000 in the same period of last year, the data showed.

“How pronounced and persistent the further fallout on the Chinese and global auto sector will be in the next few months is impossible to forecast,” wrote UniCredit economist Andreas Rees in a Friday research report.

Separately, Coca-ColaKO, +0.19% said it estimates an approximate 2- to 3-point impact to unit case volume, 1- to 2-point impact to organic revenue and 1- to 2-penny impact to earnings per share for the first quarter, citing coronavirus. China ranks as the third-largest market in the world in terms of unit case volume.

“Needless to say, the most important factor is the evolution of the coronavirus,” Rees wrote.

Looking ahead, investors will be watching a flash reading of U.S. private-sector manufacturing activity, the PMI Composite Flash, due at 9:45 a.m. Eastern Time, and a reading of existing home sales for January at 10 a.m.